University of Sunderland

BA (Hons) Business Management

MODULE: SIM337 Contemporary

Developments in Business and Management

Submitted by: Tran Vu Phuong Uyen

Student ID: 169163901

User ID: TRANUYEN

Submission Due date: 12th January 2018

Word count: 3,310

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Table of content

Table of content....................................................................................................2

EXECUTIVE SUMMARY........................................................................................3

INTRODUCTION....................................................................................................4

TASK 1. External factors and their impacts on DND hospital..........................5

Politic..................................................................................................................5

Economy............................................................................................................6

Society................................................................................................................8

Technology........................................................................................................8

Environment....................................................................................................10

Legality.............................................................................................................10

TASK 2. Ethics and Corporate Social Responsibility (CSR)..........................12

1. Essence of ethics and corporate social responsibility........................12

2. Ethics, corporate social responsibility in Vietnam and the relation to

DND hospital.............................................................................................13

3. The response of DND hospital and its effectiveness...........................15

a. The response of DND hospital................................................................15

b. Effectiveness of these campaigns..........................................................16

4. Areas to be improved for DND hospital.................................................17

CONCLUSION......................................................................................................19

REFERENCE........................................................................................................20

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APPENDIX 1.........................................................................................................24

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EXECUTIVE SUMMARY

International Eye Hospital-DND is a hospital in Vietnam, which specializes in eye

disease examination and treatment. The hospital has been in the market for only

more than 6 years but has already gained recognition from the community and

the government. This report will analyze the external factors that affect the

hospital and discuss about business ethics and corporate social responsibility.

In general, DND and many hospitals in Vietnam are influenced by factors

including politic, economy, society and culture, technology and legality. These

factors could form the potential and strategies of the organization. Ethics and

corporate social responsibility are important for business, especially to increase

the value of organizations. In Vietnam, there are many social issues, which need

to be solved, and organization could contribute to dealing with the problems of

the community.

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INTRODUCTION

Currently, business environment is one of the factors, which have the most

significant change. Businesses, besides product and service quality, have to

create their value and image in many different ways to be sustainable in the

market. This report will analyze the case of International Eye Hospital-DND, an

eye hospital in Vietnam that has just been in the market for a few years. The

report will firstly examine the external factors, which could affect the business

activities of the organization, using PESTLE analysis. Secondly, it will discuss

about one of the most common issues in business environment, which is ethics

and corporate social responsibility. With different ideas, concepts and facts

gathered from many sources, the report also provides basic concepts about

ethics and corporate social responsibility and how it is affecting and forming the

decisions of organizations like DND. Also, the response of the organization to this

issue will be discussed and possible recommendations for further development

will be provided. The focused country will be Vietnam, where the hospital is

currently operated.

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TASK 1. External factors and their impacts on DND

hospital

To examine the external factors affecting DND hospital, it is necessary to use the

PESTLE analysis. The analysis focuses on important external elements,

including politic, economy, society and culture, technology, legality and

environment. In the context of this report, the most relevant ones will be

discussed.

Politic

Politic, since a very long time, has always been considered as an element, which

directly affects businesses. Vietnam, compares with many other nations, has a

stable political environment. Aswathappa (2008) states that business

organizations have to handle risks as their long-term profitability and value are

significantly influenced by the decisions of the government, especially those that

are related to the economy.

Firstly, the decisions of the government affect businesses via decisions regarding

economy. Vietnam, during the last decade, has implemented many decisions,

which change the economic environment of the nation. In 2006, the country

joined the World Trade Organization (WTO). After 10 years from the decision, the

GDP of the nation has been increasing significantly, and has attracted over

22,000 foreign direct investment (FDI) projects (Vietnamnet, 2017). An open

economy has been creating countless chances for businesses, especially the

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private sector. Before the “Reform” strategy in 1986, Vietnam economy system

was mainly controlled by the Government.

Besides decisions to reform the economy, the government could also influence

the economic sector via the changes in interest rate and tax rate. If the interest

rate increases, the cost of borrowing capital for companies will also increase,

which affects the capital structure. Changes in tax, on the other hand, will have

impacts on the profit of organizations. Currently, the corporate tax rate of Vietnam

is remained at 20% (Trading Economics, 2017).

For a hospital like DHD, besides economic policies, the organization is also

affected by decisions of the government, which related to healthcare industry. For

example, according to De (2016), the current policies of Vietnamese government

tend to support public and government-owned hospitals, rather than private

hospitals. Insurance policies, according to the author, are also arranged in the

ways which support public hospitals more. Those policies force private hospital to

invest more in facility and customer service, in order to be competitive.

Economy

Economy is perhaps one of the most important factors to be evaluated when

considering the potential of a business. Economy contains many variables could

potentially affect business organizations. According to Carysforth and Neild

(2002), there are three main changes in the economy that every business needs

to understand, including the change in interest rates, the change in prices and

the change in exchange rates. Those factors could form the decision of business

organizations.

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Vietnam is a developing country with the economy is on the way of expanding.

The nation had gone through several wars before gaining the independence in

1975 and the economy since then started recovering, especially after the

“Reform” strategy, run by the government in 1986. The strategy had helped

Vietnam’s economy growing at an average annual rate of 7.5% in 1991 - 2000

period (Vuong, 2014).

The development of economy plays a very important role in forming the potential

for a business. A country with high-developed economy has citizens with high

income and therefore, their purchasing power is also better than those in less-

developed nations. There are many factors which could reflect the economy of a

nation, economic growth rate is one example. During the last 3 years, the

economic growth rate of Vietnam has been remained from 5% to 7% (Trading

Economics, 2017). Higher income will affect the choice of people. In medical

treatment, Vietnam used to have public hospitals as the most common choices of

patients. Private hospitals have just started their trend in the last few years, and

the fees are often much more expensive than public hospitals. Therefore, it is an

important consideration for the people to choose between a private and public

hospital. Higher income will make patients having more choices and private

hospitals will have the chance for business.

Society

Society and culture are factors, which need to be considered by every single

business, in any industry. Basically, society and culture will form the demands of

the people. In order for business organizations to understand the behavior of the

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customers, identifying the attitudes and beliefs of the society is very important

(Martineau & Feller, 2000). There are many factors, which help forming the

culture and behavior of the society, such as knowledge or economy.

Vietnam is on the way of rapid development, especially in economy, as discussed

in the previous section. Higher living condition has helped people enhancing their

knowledge and therefore changed their demand for goods and services. In

healthcare and medical service, Vietnamese society used to choose public

hospitals. The reason is that those hospitals have reputation and been

established for a very long time. Also, the price in a public hospital is currently

cheaper, especially for those who have bought health insurance. With higher

income and knowledge of people, private hospitals are step by step being

preferred by the society.

Technology

Technology is matter for every single business. According to Needle (2010),

technology is probably one of the most widely used and least precisely defined

term in business, but it is affecting businesses in all its forms and activities. In a

basic definition, the author states that technology is essentially a very broad

concept referring to the application of available knowledge and skills to create

and use materials, process and products.

In the last few decades, the world has been witnessing the rapid development of

technology, in many areas, such as education, business or medical treatment.

Vietnam is not an exception. The growth of an open economy and knowledge

has been helping the private sector affording to adapt modern technology. For a

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private hospital like DND, it could be stated that technology plays an important

role in forming the competitive advantage of the organization. To compete with

the rivals, especially public hospitals, which have been receiving more support

from the government, DND has to focus on developing its technology in eye

disease treatment.

DND hospital has invested in developing technology with modern system of

examination and treatment equipment. Modern machines allow the hospital to

exactly evaluate the quality and morphology of the cornea on each patient (DND,

2017). With better facility and equipment, private hospitals like DND could fairly

compete in the market and give better treatment for patients.

Information technology is another important element, which matters for any kind

of businesses, not only hospitals. Firstly, the Internet has been changing the

business environment in the fastest way. According to Coupey (2016), the

changes to the types of interactions between companies and their customers

caused by the Internet will definitely affect the market structure. Applying the

development of the information technology helps organizations managing

business effectively. For example, DND hospital could build up a secured and

detail database about the clients, conduct market research and development,

handle marketing activities and interact with the potential customers, all via the

information system. Overall, technology in medical treatment and information

technology is the factors, which affect hospitals like DND the most.

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Environment

Environment is a factor, which is becoming more and more important, especially

nowadays, when the world is facing serious environmental problems. Vietnam is

among the nations that have serious environmental issues, especially air

pollution. Human activities in the nation are currently causing many problems.

According to statistic from Vietnam Youth News (2013), 60% of waste discharged

to the environment in the country is without treatment.

Environmental issue is the responsibility of every individual, but organization can

strengthen their values and images in the market if they care about the society,

including environmental issue. There have been many big corporations caring

about the environment and increase their value in the market and in the eye of

the society. This action is part of business ethics and corporate social

responsibility, which will be discussed more detail in the next section.

Legality

Healthcare is an important sector, which significantly affects the health and life of

people, therefore, it is very important for the government to set up the rules and

regulations for this industry. Every hospital has to meet certain requirements from

the government in term of facility, license and certification before being opened.

Besides, hospitals also have to follow the laws issued by the government

regarding how to treat the patients or how to fulfill the duty with the community.

Failing to obey the law might cause serious damages for organizations.

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TASK 2. Ethics and Corporate Social Responsibility

(CSR)

1. Essence of ethics and corporate social responsibility

There have been many different authors discussing about business ethics and

corporate social responsibility. According to Sims (2017), for many people,

business ethics is the study of business situations, activities and decisions where

issues of right or wrong are addressed. CSR, on the other hand, could be seen

as a business approach contributed to sustainable development of organization,

via activities, which contribute values to the society.

Ethics in business, since a very long time, has been the concerned of many

people. An ethical business tends to know how to keep the balance among

different interests of different groups of stakeholder. For example, corporations

could care about the personal life of employees, protect the right of consumers or

truly disclose necessary information for investors. CSR, on the other hand, could

be handled via activities or campaigns contributed to the development of the

society. The benefit brought by CSR seems to be obvious in most of the cases.

Thorpe (2013) states that most of his interviewed companies share that CSR

helps their employees being happier.

There are arguments discussing whether or not CSR is really necessary for

businesses. The reason is that not many organizations could afford to manage

this approach. According to Reeves (2012), there are certain advantages of CSR,

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such as reducing energy cost, brand differentiation, long-term thinking, customer

engagement and employee engagement. However, cost seems to be the most

significant disadvantage of CSR, especially for small business (Kielmas, 2017).

Overall, it could be seen that the most important benefits from CSR are boosting

the value and enhancing the image of the organization. The main disadvantage

is that it takes cost and time for a small organization to come up with corporate

social responsibility.

2. Ethics, corporate social responsibility in Vietnam

and the relation to DND hospital

Business ethics in Vietnam has been an issue since a very long time. Since the

nation joined WTO in 2006, the business ethics was forced to improve by the

government to create a positive environment for businesses to compete.

However, the current situation of business ethic in Vietnam is still a big concern.

There are currently many issues with the business ethics in Vietnam. One

example is the transparency. According to Unruh and Arreola (2010), despite

having made progress in establishing regulations for greater transparency, the

implementation has still ben irregular, creating risks for business. The author

states that the issues especially arise around property ownership as foreigners

usually find themselves trapped by unclear real estate title. Pham (cited by

Vietnamnet News, 2006) also states that more than 90% of Vietnamese

companies, along with approximately 2.6 million individual businesses are

household and family-run, with weak management and insufficient transparency.

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Food safety is also another issue of Vietnamese business when the government

has not yet effectively managed the safety condition of food business. In term of

corporate social responsibility, as discussed in the previous section, it is not

preferred by small businesses, which are counted as the majority of businesses

in Vietnam, and CSR seems to be seen in only big companies. However, CSR is

needed in Vietnam because there are many issues affected the life of people.

One example is the pollution in the nation. A research conducted by Yale

University figured out that Vietnam’s air quality ranked 170 th out of 180 surveyed

countries (Vietnamnet News, 2017).

With many social issues, together with the businesses in Vietnam are

encouraged to promote ethics and CSR. As a hospital, DND could enhance its

value and image if it has certain strategies to care about the development of the

society. Currently, healthcare industry of Vietnam is having two main issues. The

first issue is the moral of doctors. There is a problem, which has been concerned

by the society, which is giving “extra money” for doctors to be “treated better than

other patients”. This issue comes from many reasons, such as the psychology of

the patient. Also, 74% of doctors in Vietnam state that their salaries are not high

enough for them (Ho, 2017). Many doctors are also detected giving medicine for

patients with high price to receive commission from the sellers. The second issue

in medical service is the medical waste from hospitals. Among the amount of

wastes that is without treatment in Vietnam, medical waste takes a notable

portion and it is very dangerous as it could spread the diseases to the community

(Vietnam News, 2015). Many hospitals have been found violating the regulations

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about medical waste. In general, hospitals like DND will be highly appreciated by

the community and might gain the support and recognition from the government

of they could solve the issues above.

3. The response of DND hospital and its effectiveness

a. The response of DND hospital

Acknowledging the importance of ethics and CSR, DND hospital has been

handling several campaigns and activities to care for Vietnamese community.

Concentrating on customer service

Understanding that the patients need to be served by not only the medicine and

the treatment but also the attitude and the heart of the staffs, DND hospital has

been concentrating on training the doctors and employees about the positive

attitude to the customer, especially when people are having the concern about

being treated fairly in public hospitals. The doctors of the hospital not only take

care of the patients face to face but also set up a place on the website, where

patient and people could pose the question and receive comprehensive answers

from the experts.

Free examination and meaningful campaigns

With the vision is helping not only the patients with enough financial condition but

also other people who are in a hard situation, DND hospital has been going

through many campaigns and activities to help people who are in difficult

situation. For example, recently, the hospital has cooperated with other hospitals

to visit and conduct free examination for poor households in Thanh Hoa Province

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(DND, 2017). The campaign has raised the awareness of the community about

eye disease and also helped many poor people approaching the treatment.

Another meaningful campaign of the hospital is to give free eye treatment and

examination for Vietnamese mothers (those who have their sons joined the

Vietnamese war and fought for the nation). Currently, the hospital has been still

working together with many organizations among the country to help building up

a healthier and better community. Also, the hospital has run the campaign, which

gives the scholarship for poor students in Dien Bien Province.

b. Effectiveness of these campaigns

The effectiveness of DND hospital’s campaign could be seen via certain

achievements. During the last 5 years, the reputation of the hospital has been

well - known by many people. The page of the hospital on Facebook, the world’s

current largest social network, has more than 56,000 people following. This

number is higher than many public hospitals in Vietnam.

More importantly, there are more and more experts in eye disease from both

Vietnam and oversea, joining the hospital with high loyalty. Caring about the

community helps the organizations being appreciated by not only the patients but

also the employees.

Caring about the community, DND hospital has been receiving recognition and

appreciation from the government and the citizen. The evaluation of customers

could be found on social network or many other public websites. It could be

stated that DND is step - by - step raising its influence among Vietnamese

society. Even though people are attracted by the modern technology and the skill

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of the experts, it could be seen that activities for the community plays a very

important role in making the influence of the hospital.

4. Areas to be improved for DND hospital

Although having gaining certain successes, there are still several areas that DND

hospital could improve to strengthen its position in the market.

Environmental activities

Has been promoting the campaigns and activities to help people, but DND

hospital has not yet conducted any activity which helps improving the

environment, one of the most concerned issue in Vietnam. Especially in the

current context when many hospitals in Vietnam are criticized due to harming the

environment with medical waste. DND hospital could run monthly campaigns

such as cleaning up the streets or corporate with environmental organizations in

project to enhance the environment.

Human resource development

Human resource development is one of the most important factors that tell

people whether or not an organization is ethical. Keep improving the working

conditions and policies will help not only increasing the productivities of staffs but

also enhancing the value of the organization in the mind of people. Moreover, the

level of employee loyalty will also increase. Therefore, making a good workplace

is the mission of any organization in any industry, and it has to be made better

gradually. DND hospital is not an exception. The hospital could review policies

and eliminate the inappropriate conditions. Also, promoting activities to care for

the personal life of employees could be a good suggestion.

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Sponsoring

Sponsoring activities could be promoted more, bases on the financial condition of

the organization. In Vietnam, there are many meaningful activities conducted by

non-government organizations. If the budget allows, the hospital could sponsor

for or make partnership with those organizations on projects to helping people

get a better life. Nowadays, working on projects for the society could be

considered as one of the marketing strategies that help organization survive in

the market with long - term development.

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CONCLUSION

In conclusion, the report has outlined the case of International Eye Hospital DND,

a private hospital in Vietnam, which has just been established for more than 6

years. In analyzing, the hospital is affected by external factors, which are the

political environment of Vietnam, the economy of the nation, the society and

culture, the development of technology and the laws applied for medical industry.

Those factors influence the business of the hospital in both direct and indirect

way. Ethics and corporate social responsibility, on the other hand, are important

for any organization, as the people are concerning more about the contribution of

a company for the community, not only the quality of its good or service. In this

context, organizations like DND hospital need to figure out an appropriate

strategy to deal with the need of the society.

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APPENDIX 1

Company profile

Was established in 2011, International Eye Hospital-DND could be seen as the

first eye center based on international standard in the North of Vietnam. The

hospital specializes in eye-disease treatment such as diagnostic testing or

advanced surgery.

Being in the market for only more than 6 years but the hospital has already

gained certain notable achievements. The hospital has a strong team of experts

in eye treatment with modern facilities to serve the patients in the most effective

ways. The doctors are trained locally and oversea with many years of experience

in Lasik eye surgery (DND, 2017). All the other staffs are also trained to serve the

people in the most professional way.

The hospital has a very clear vision of development. It commits to provide high-

quality healthcare and services with all patient information being treated in the

strictest confidence. Also, the good service will be provided bases on

professional teamwork and international standards.

During a few years in the market, the hospital has been handling many activities

to care about the community and strengthen its position. In the context that the

24
business environment is becoming more and more competitive, DND is working

on sustainable strategy to survive in the market for long term.

25